WG Economics - 1st meeting (March 20 & 21, 2014) Assessment of Environmental and Resource Costs in Cyprus

Transcription

1 WG Economics - 1st meeting (March 20 & 21, 2014) Assessment of Environmental and Resource Costs in Cyprus Agathi Hadjipanteli, Executive Engineer Water Development Department Ministry of Agriculture, Natural Resources & Environment, Republic of Cyprus 1

2 Cyprus Water Profile Location: Eastern Mediterranean, semi-arid, water poor Availability: water varies significantly from year to year Water balance: demand and supply rarely in balance Water Resources rely on rainfall Groundwater (the most accessible in the past) Surface water: very few watercourses with continuous flow, utilization through the GWP (large dams and conveyors) Desalination (drinking water security) Recycled water (highly stable source) 2

3 Cyprus Water Profile (2) Water Services & Water Uses Water Services Water Uses Drinking Water Irrigation Water Water Sewage and Treatment Water reuse 3

4 Total Cost of Water Services Financial Cost Capital investment plus O&M (incl. energy and adm. costs) Environmental Cost Environmental damage: the deviation of the WB from the good ecological status (qualitative and quantitative status). Environmental cost: the expression of environmental damage in terms of economic cost. Environmental benefit: the total value for upgrading WB condition. Resource cost WFD - Article 9 the cost of water body restoration in cases where the natural recharge rate is surpassed 4

5 Environmental Cost (step 1) 1. Identification of environmental damage corresponding to water uses Pollution Pollution due to organic load (BOD): originated from urban and livestock activities Pollution due to nutrient (N and total P): originated from agriculture, livestock and urban wastewater Pollution due to priority substances: originate from industry and agriculture (pesticides) Lack of ecological flow downstream of dams (originated from all uses) Overabstraction (originated from all uses) Environmental Benefit due to GW recharge, with recycled water 5

6 Environmental Cost (step 2) 2. Classification of the WB (quality and quantity status) based on:step - the predetermined target & - the actual status as derived from WFD Art 5: characterization & assessment of WB taking into account the anthropogenic pressures and their impact on water bodies and the monitoring (Art 8) WB were classified as: At risk (failing to fulfill the WFD targets) Not at risk to fulfill the WFD targets Need further assessment 6

7 Environmental Cost (step 3) 3. Identification of WB environmental damage in relation to EC Surface Inland Water Bodies: Pollution (BOD, N, P, priority substances) Lack of ecological flow downstream the dams Groundwater Water Bodies: overexploitation, salinization (from overabastraction) presence of nitrates Coastal (sea) Water Bodies There is no sign of environmental damage 7

8 Environmental Cost (step 4) 4. Express Environmental Damage in terms of Economic Cost Restoration method approach Env. cost due to organic or nutrient load: Restoration cost = recycled water cost (tertiary treatment) (further to the primary & secondary WTW / implem. of Dir.91/271/EC) Env. cost due to priority substances: Restoration cost = processing & recontamination cost from heavy metals and/or pesticides Env. cost due to lack of ecological flow downstream of dams: Dams for DWS: Restoration cost = desalination cost Dams for Irrigation: Restoration cost = cost of tertiary treatment Dams for DWS & IRR: proportion of the two costs above 8

9 Resource Cost The opportunity cost of alternative uses of water, when the WB is abstracted more than it is naturally charged. i.e. the economic cost which is enforced to the society for covering the excess demand For Cyprus it refers mainly for GW Bodies over abstraction, leading to quantitative as well as qualitative effects. Restoration is achieved by recharging with water volumes coming from alternative water resources available: desalination and recycling. If abstraction > annual mean recharge and: the GW Aquifer is used for DWS abstraction: Restoration cost = desalination cost of water deficit the GW Aquifer is used for Irrigation water abstraction: Restoration cost = recycled water/tertiary treatment cost the aquifer is used for both: proportion of the two costs 9

10 E&RC Costs - Synthesis Environmental and Resource Costs: allocated to the water services and their uses, based on the share of each one to the pollution (i.e. according to the uses consumption) Avoid double counting of costs: e.g. Pollution from nitrates is recovered by Dir. 91/676/EEC Salinization of GW is recovered by the quantitative restoration (RC). (EC not considered to avoid double counting). Environmental Benefit from GW recharge with recycled water: taken into account in the calculation of the resource cost (quantities used for recharge eliminate the deficit of water / deviation from the good status) Environmental cost from the operation of desalination: energy/emissions cost is already included in the price of desalinated water (increased electricity cost due to greenhouse gas permissions and the contribution to the Renewable Energy Fund). 10

11 Costs and Prices ( /m 3 ) Drinking Water (Gov. Water Projects) Drinking Water (GW sources) Irrigation Water (Gov. Water Projects) Irrigation Water (GW sources) Financial cost 1,17 (96%) 1,00 (89%) 0,34 (76%) 0,30 (61%) Environmental cost 0,04 (3%) 0,03 (3%) 0,10 (22%) 0,16 (33%) Resource cost 0,01 (1%) 0,09 (8%) 0,01 (2%) 0,03 (6%) Total 1,22 1,12 0,45 0,49 Price to end user today Cost Recovery to end user varies varies 0,17 to 0,56 full financial cost 95% 41% 61% 11

12 E&RC Costs Our Comments Method: Simple to use Data availability Allows institutional commitment implementation Rather theoretical; full restoration (good status) is not technically readily possible E&RC may give the right signal to the consumers in order to be effective, pricing must be combined with other related management tools 12

13 The methodology presented was developed by a consortium of experts during the study for the implementation of WFD Art9 in Cyprus ( ) thank you for your attention! 13